Tag Archives: LBMA

Is Silver Getting Ready To Rip Higher?

The big buzz yesterday in the precious metals market was the news that Deutsche Bank has agreed to settle charges for its role in manipulating the London Bullion Marketing Association (LBMA) daily gold/silver price fixings. My view on this, albeit admittedly jaded, is that it is akin to the settlement charges being paid by the big Wall Street banks for their fraudulent behavior in the housing bubble mortgage market. Although Deutsche Bank has agreed to “spill the beans” on other banks, I have yet to hear any mention of JP Morgan, Citibank, Goldman Sachs or any number of other western bullion banks who engage in daily price intervention in the gold and silver futures market on the Comex.

My view on the matter is that until I see otherwise, this is nothing more than a “we took care of the problem, move along there’s nothing else to see here” situation. DB is like a trapped felon who blinked in the game of “Prisoner’s Dilemma” and gave up a couple of names in order to let it continue forward in its endeavor to save itself from collapse. While other indictments may be doled out, I do not see this as an advancement in the effort to reform the trading activity in the gold and silver markets. After all, the banks are manipulating the market on behalf of the western Central Banks and Governments who are highly motivated in their effort prevent a sustained rise in the price of gold from signaling the west’s continued financial and economic deterioration.

While the Deutsche Bank announcement may trigger some celebratory dances in the precious metals community, rest assured that for every bank removed from its gold/silver market manipulation service, they will be replaced by banks “sitting on the bench.”  The “reformed” LBMA gold fix process is proof of concept.  The prima facie format has been somewhat altered, as have the names involved.  But it can be argued that the “reformed” price fix process is perhaps even more permissive of manipulation than the old format.

The more interesting issue in my opinion is whether or not the bullion banks’ ability to keep the price of gold and silver capped with any relative degree of success is fading. History has proved that all forms of market intervention eventually fail.  If the intervention in the precious metals market did not ultimately fail, it would be a statistically unique event.  I would have the readers recall the fact that the Rothschild family, which founded the London gold fix, withdrew from its involvement and connection to the LMBA, including the twice-daily fix process, in 2004.  Something like this happens for a reason…

It’s been my view that silver hit a bottom in mid-December when the Comex silver contract closed at $13.72.  The bottom was affirmed the day that silver was instantaneously plunged down to $13.58 for the purposes of the LBMA price fix and the futures immediately thereafter snapped back over $14.   That was perhaps the most audaciously blatant act of manipulation that I’ve witnessed in any market in over 30 years of involvement in all aspects of the financial markets.  I also believe it was a last-ditch capitulative effort of sorts by the bullion banks.  And, of course, the LBMA never did offer an explanation for the egregious price anomaly.

Since mid-January the price of silver has been uncharacteristically “buoyant,” especially in relation to the price-action in gold.  In general, silver outperforms gold on days when gold is being successfully manipulated lower and, in general, it outperforms gold on rally days.

I’m not an adamant technician or chart-reader, but the two graphs below are suggestive of a market that is ready to make make a big move higher (please click in the images to enlarge):

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The graph on the left is a 2-yr daily of Comex silver. It appears to have carved out a nice bottom and it has broken out above both its 50/200 dma’s after successful “re-tests” of each.   The graph on the right is 16-year weekly that goes back to the beginning of the secular bull market in the precious metals.  After the big move up from 2008-2011, silver (manipulatively) pulled back a 16-year uptrend line and bounced.

Whether or not this is nothing more than a short-term bounce or the start of the next big move higher remains to be seen.  I have told colleagues since the beginning of the year that I won’t break out the first case of champagne until silver trades above $20 and moves higher from there.  Certainly the systemic fundamentals which support much higher prices for gold and silver grow stronger everyday.

Having said that, I remain firm in conviction that silver will be the best performing asset class at least through the rest of this decade.  I also am growing more confident that both gold and silver are set up to make a big move higher over the next several months.

The latest issue of the Mining Stock Journal was released last night.  In addition to providing what I believe is somewhat unique insight on the precious metals market, I present a junior mining stock that has been overlooked by the market.  After an extensive conversation with the CEO last week, I don’t think this stock will remain overlooked much longer.   You can access this report here:  Mining Stock Journal.

Guest Post: Moving to the Post LBMA-Era Gold Price Reset

The LBMA appears now to be in an intractable and rapidly degenerating position – with the vaulted gold available outside of the Bank of England and ETF holdings largely gone from London, how do you manage the appearances of a spot gold market with turnover of 200M oz per day and a massive open interest? While gold flow from the miners provides some liquidity and enables the LBMA paper gold market to provide some gold delivery and suppress gold prices, it is obvious that a massive gold event has occurred and that this paper market will not be the same given increased pressure for physical delivery. The London market cannot sustain any material gold withdrawal as occurred in 2013.

You can read the rest of this article by Dave Jensen here:  Watch Out

Official Intervention In The Gold Market Is Now Blatantly At Work

The damage done to gold on Friday was due to skillfully timed flash crashes rather than powerful selling.  – John Brimelow, JB’ Gold Jottings Report

As a wider audience of market observers becomes aware of the flagrant use of the paper gold market to manipulate the price of gold, the degree of intervention in the gold market by the Fed/Treasury becomes more openly aggressive.

Eric Dubin of the News Doctors wrote a useful commentary on the current effort by the “gold cartel” to take down the price of gold:

The cartel is acting aggressively this week on top of the mountain of paper-based gold issuance into the COMEX market they’ve been shoveling into the short side already – for weeks – in an effort to slow momentum. Now, as you see today, with traders getting nervous considering sky high commercial short positions and an FOMC meeting starting tomorrow, is it any wonder that the cartel was able to get some traction to the downside?

You can read the rest of his analysis here:  The News Doctors

 

“In Gold We Trust” – CNBC Asia’s Bernie Lo

Since the bull market in precious metals began in late 2000 / early 2001 the mainstream media has gone out of its way to function as a propaganda tool in the official war on gold conducted by the biggest beneficiaries of the thoroughly corrupted western banking, Central Bank and Government systems.

Quite amazingly, CNBC allows its CNBC Asia affiliate and morning (Asian hours) anchor, Bernie Lo, to host Bill “Midas” Murphy on occasion to discuss the blatant and unfettered manipulation of the gold market.   Bill was on yesterday (Tuesday, Feb 23) for a seven minute segment that’s worth watching, if not for the insight provided my Bill then for the exceptionally rare glimpse of a mainstream media financial programming host who is willing to pullback the media’s propaganda curtain and expose the truth (click on the image or this LINK to watch the broadcast):

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Goldman Sachs’ technical analyst, Jeffrey Currie was on CNBC again urging clients and viewers to sell or short gold. With regard to this, I’ll point out that Currie had an $800 price target on gold for quite some time and he moved his target up to $1,000 once he understood the embarrassment of the $800 target.

I honestly don’t know how anyone with more than two brain cells in their skull to rub together would ever pay attention to any market recommendation coming from Goldman given the firm’s track record of taking the other side of their publicly-issued investment “advice.”

Too be sure, at some point the precious metals sector is going to experience a pullback.  Perhaps as early as this week.   But to the extent that inexorable and unfettered official intervention the market has prevented the price of gold/silver from a true price discovery process, it is quite possible for the metals to become extremely “overbought” and stay overbought for an extended period of time.  I’m not making this my forecast  – I’m saying that markets behave in unexpected ways when price-control measures are in place and the “time for a pullback” side of the proverbial ship is getting very crowded.

On a related matter, I featured a junior silver exploration stock in my January 10th Short Seller’s Journal on the premise that investing in mining stocks is a “contra” NYSE stock strategy and therefore a surrogate method of shorting the market.  The stock is up 38% since then (44% in Canadian dollars) and I’m expecting some good news coming from the Company next week.  I’m offering a copy of this issue to new subscribers:  Short Seller’s Journal.

I will also be rolling out a Mining Stock Journal, possibly as early as sometime next week and subscribers to the SSJ will be able to subscribe to the new report for half-price.

Silver Will Be The Trade Of The Decade At It’s Current Price

I’m starting to warm up to the idea that the fraudulent silver price fix on the LBMA a couple weeks ago marked the final “capitulation” of the nearly 5-year price pullback in silver and 4+ year pullback in gold.  We have yet to hear a satisfactory explanation from the LBMA for the exceedingly odd price behavior of silver seconds before the  a.m. London silver price was set on January 28th.

I believe that event marked the “last gasp” effort by the highly corrupt LBMA bullion banks to shakedown the physical silver market in order to get their hands on as much physical silver as possible at as cheap of a price as possible.  I believe, not uniquely by the way, that the synthetic short interest (paper derivatives shorts) in silver is even worse than for gold, which we know is at least 100:1.

Big banks hate losing money and will do anything – legal or illegal – to avoid losing money or to minimize losses.  I saw this first-hand and peripherally participated in activities designed to minimize losses when I worked on Wall Street in the 1990’s.  Everything is worse now in that regard and the people who are supposed to enforce the laws and oversee trading activities at these banks are now in on the corruption.

With that as the preface, I believe silver is beaten down and cheap relative to gold and any other investment alternatives and I think buying silver now – at it’s current price – will prove to be the trade of the decade.

Right now gold is outperforming silver on up-days BUT silver outperforms gold when the metals sell off.  Typically gold will outperform silver in the early stages of a big bull market move.  Gold current outperformance vs. silver is reflected in retail activity, as noted by Doc at Silver Doctors and some other bullion dealers to whom I spoken about the market recently, in which sales volume of gold coins is outpacing volume in silver.

But this will soon crossover as gold appreciates in price and waves of new buyers flock to silver rather gold because it feels better to buy more ounces of silver than gold.  Silver is poor man’s gold and always has been for 1000’s of years.  When this dynamic kicks in, the gold/silver ratio will drop quickly from its current 78x.   I suspect before this bull market is over, the GSR will drop well below 20, if not 10.

We saw this in 2011, when silver began to go parabolic before the western Central Banks had seen enough and began to throw 100’s of tonnes of paper gold and silver at the market in order to not only prevent the metals from moving higher but to beat down the price on gold and silver to their current levels.  In the bull move from late 2008 to April 2011, the GSR dropped from 100 to 32.

Eric Dubin and “Doc” hosted me for their weekly metals and markets podcast last week.   We discuss a range of topics but focus on the precious metals.  Note:  I mention a new emerging junior exploration silver miner that I featured in a recent issue of my Short Seller’s Journal.  Anyone who subscribes to the SSJ and mentions that they heard about it on the Silver Doctors podcast will receive a copy of that back-issue when they subscribe:

New Bull Market For Mining Stocks?

Concerning gold and noting that this is Friday, “they”…and we’ve no idea who “they” are, but we do indeed know that “they” exist… are out there again making mischief as they have tried to do so many times in the past. Fridays “They” wage war on gold.  – Dennis Gartman from his Jan 29 “Gartman Letter”

With the entire precious metals community is still discussing the fraudulent LBMA a.m. silver fix, I happened to notice that the HUI gold mining stock index quietly is up 20% since January 19.

UntitledWhat I find interesting about this is that if this were a stock like AAPL or AMZN, for instance, CNBC/Bloomberg News/Fox Biz would be falling all over themselves with the declaration of a new bull market in those stocks.  Instead with regard to mining stocks – crickets.

Perhaps even more interesting is this graph to the left, which shows the performance of the HUI from the inception of the Untitled1precious metals bull market vs. the S&P 500 over the same time period.  This is yet another example of information that will never be presented on the adult cartoon channels also known as financial news programming.  Since the end of November 2000, the S&P 500 has traveled from 1314 to its current 1919, or 46%. But the HUI mining stock index has moved from 42 to its current 120, or 285%.  That fact would probably surprise a lot of people.

Turning to the quote at the top of the blog, you’ll note that until very recently Dennis Gartman habitually used to lift his leg and urinate on the investment community, which he referenced simply as “bugs” (as in “goldbugs”).  He used to veto with an iron fist any notion that the precious metals market is manipulated.  Wonder what all off a sudden gave him religion?

Here’s another fact that might surprise a lot of people:  It’s now being estimated that India imported at least 110 tonnes of gold in December.  In addition, Swiss and Hong Kong gold exports to China reached a record in December.  It’s estimated that China and India combined imported 300 tonnes of gold just in December.  That goes a long way toward explaining why the amount of gold made available for delivery on the Comex has reached a low level not seen in decades and the paper to gold ratio has reached a level that is mindblowing.

The point here is that, just like the true underlying fundamentals of Amazon.com’s business model and financials do not fit the market valuation given to its stock, the underlying fundamentals of the physical gold do not fit the price as reflected in the fraudulent paper markets controlled by the LBMA and the Comex.   If anything, yesterday’s LBMA silver fix reflects the endemic corruption in the paper gold/silver market.  It also reflects the extreme degree of desperation to control the precious metals markets by the western bullion banks.  The bottom line is that they are running out of physical metal with which to perpetuate their fraud.

Thus I’m not surprised that the mining stocks, as represented by the HUI index, are up 20% in a short period of time.  The mining stocks are at their most oversold and undervalued in U.S. stock market history, especially when evaluated in relation to the price of gold and silver.   But don’t wait around for Maria Bartiromo or Joe Kernan to start promoting the mining stock sector – that will never happen.   As Dennis Gartman has noted, it’s a war on gold.  But my best guess is that the key battles are now being won by the “bugs.”

The Friday Gold Price Raid Reeks Of Desperation

The bears are driving gold down into zones at which [Asian] physical demand will become prodigious.  – John Brimelow,  John Brimelow’s Gold Jottings Report

The economy is starting to collapse.  All the non-Government-reported economic metrics are showing that the bottom is falling out of the demand side of GDP at all levels of the economic system – OEM, wholesale, middleman, retail.

The cable biz news networks have sent their emissaries out to the landmark Times Square/Herald Square stores in NYC to try and manufacture a story about “Black Friday.”  Aside from the footage of the pre-dawn door openings at Macy’s – and at a few semi-ghetto area Walmarts around the country where fights broke out – there is no story.  I just saw a clip of some blonde bimbo from Fox Biz at the Times Square Toys R US store – it was very quiet in the background aside from some curiosity seekers.

So why not cover up the truth by hiding the “canary in the coal mine” and blasting the price of gold?   That’s exactly what happened on Friday morning at 8:00 a.m. EST:

UntitledAs you can see from the graph to the left, the trading in gold during the Asian and early London hours was largely subdued. At 8:00 a.m. the Comex paper gold contract went into its now-familiar cliff-dive formation.  Bare in mind that this is probably one of the most quite, low-volume trading periods of the entire week, as Asia and the Middle East are in bed and London’s paper gold market is starting to doze off the weekend.   No one single other commodity  or market index exhibited any unusual trading patterns or volume when gold was smashed.  Even silver, after an initial “sympathy” sell-off, has held up remarkably well.  This was an intentional raid on the gold market.

Between 8:00 a.m. and 8:30 a.m., 19,595 contracts were traded, largely dumped into the market.  This is many multiples higher than the typical pre-Comex floor open volume. Make no mistake, any seller looking to move, 1.96 million ounces of paper gold – approximately 58 tonnes – would wait for the periods of time when the there’s is a lot more volume in order to mask the amount of paper he needs to sell AND to maximize the sale proceeds.

The sell operation put into motion did not have the slightest intent to maximize proceeds – it was sheer shock and awe.  Interestingly, GOFO/lease rates in London are exhibiting the signs of increasing “stress” on the demand for physical gold deliveries.  The GOFO rates posted this morning were negative out to three months and the rates for 1 week and 1 month had moved from -.30/-.20 to -.35/-.25, respectively.   This means that any entity looking to borrow gold collateralized by a cash was willing to pay a higher rate to do so today than last week.

Interestingly the mining stocks seem to be looking “through” the extreme price suppression of the price of gold and have recently been diverging from the latest take-down:

Only time will tell if this positive divergence between the mining stocks and the price of gold is aUntitled harbinger of a big move higher in the price of gold.  A lot of contrarian style analysts are starting to call for a big move up in the price of gold:  Gold/Gold Stocks and Get Ready For a Year-End Gold Rally, for instance.

I believe that as it becomes more apparent to a wider audience that the U.S. economy is collapsing, big investors will be forced to dump their hideously overpriced stocks and find a hiding place, away from the fraud-infested paper assets.  That hiding place will be physical gold.

The LBMA And Comex Gold Markets Are In A State Of Collapse

missingbullionThe disappearing stock of physical gold on the Comex and the LBMA has been documented and discussed by several analysts recently, including this website.   In correlation with the disappearing physical gold is the  preposterous amount of paper gold claims issued against the dwindling supply of gold both in NY and London.

But what does it mean and where is all this gold going?

Long time precious metals market professional and analyst, David Jensen, has written a must-read analysis which explains why the explosion in the amount of paper gold and the disappearance of physical gold is transmitting the message that the NY and London bullion markets are collapsing:

Many will chuckle at the proposition of Western gold market failure and note that the price of gold has gone nowhere. If the markets are in collapse due to lack of available of gold, then where is the price action exploding to the upside? Well, digital gold and silver are still available in copious (infinite) amounts and continue to trade on both the LBMA and COMEX exchanges – you can have as much digital or virtual metal as you want on these digital exchanges. There is no shortage of virtual metal and thus the virtual price that most investors follow won’t move up. The bullion banks have always sold-down this virtual gold price when it has risen.

The telling of the story is instead in physical metal availability and so we look first to the LBMA – the primary global ‘physical’ exchange. The LBMA indicates in it owns market guide that its primary gold trading contracts, unallocated spot market contracts which are claims for spot physical gold (ownership right-here, right-now), give the holder just an unsecured claim for physical gold. This has allowed the creation and trading of non-existent gold to the point that the London spot physical gold market trades 200% of the global annual gold mine production of gold – each day.

You can read the rest of this article here:  LBMA/Comex Gold Markets In Collapse

We must not forget that when Germany, in 2013, asked for the return of 674 tonnes of their gold primarily from the Federal Reserve and some from France, they only received 5 tonnes. They were then told that they could get the rest back by 2020. They then announced that they actually received around 150 tonnes back in 2014.

But Germany has since stopped repatriating their gold, with Merkel declaring that Germany is happy holding its gold in the United States.   Egon Von Greyerz, King World News

 

The Manipulation In Silver Has Reached An Extreme

You think the silver reported as being held by the SLV ETF Trust is really all there?  Really?  I guess you’re probably expecting a visit from Santa Clause in about a month as well…Silver has been hammered by the paper market for 16 trading sessions in a row.  This is the longest losing streak in the history of silver futures trading.

The manipulation of both the metals markets and the stock market has reached proportions that would have been unfathomable before the 2008 de facto financial system collapse.  The Fed has been intervening in the markets since its inception, but the executive order signed by Reagan authorizing the Working Group on Financial Markets – a secretive subset of the U.S. Treasury Department, opened the door for the full-fledged near-continuous intervention in the markets we are now witnessing.

Clearly, there is something very wrong going on behind “the curtain” and the Fed, in conjunction with select TBTF banks and hedge funds seems to be doing whatever it takes to keep it contained and hidden from the masses.

The Doc and Eric Dubin invited me on to their weekly market Metals and Markets show to discuss these and other issues:

Gold (Silver) Is The Most Manipulated Market In History

Our fractional reserve financial system is just a gigantic Ponzi scheme. It can only survive as long as it expands, which is to say, as long as new debt is flushed through the system to finance old debt. But like all Ponzi schemes, the larger it grows the more unstable it becomes. Eventually, it collapses of its own weight.  -James Sinclair in 2009

The western Central Bank/bullion bank paper gold manipulators have become obvious. The reason is that the there is nothing stopping them from manipulating the market. Eventually the physical demand from Asia will undermine their paper gold manipulation activities, but big buyers of physical who demand delivery have no reason to stop the price capping, obviously.

James Turk discussed the various factors driving the manipulation in a King World News interview. I’ve created a graphic to illustrate the manipulation of the gold market as it occurred from Sunday into Monday:

This rally in the precious metals was the result of investors moving out of currencies to a safe-haven. It was an expected and natural reaction after the Paris attacks. Then came the unnatural, second and completely different precious metals market. Gold and silver ran into a solid brick wall when London opened. The difference between the way gold and silver traded in Asia and what happened in London was as stark as the difference between night and day.

Are we to believe that in striking contrast to what we saw in Asia, there were no safe-haven buyers in Europe?

The reality is that the central planners were out in full force with their market interventions in London, selling persistently and using their algorithms to prevent gold and silver from climbing any higher.

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The price of gold jumped at the open of Globex trading on Sunday evening. This would be expected after a string of bad economic and earnings reports littered the news wires late Friday. And then, of course, the event in Paris. But as you can see, after Asia was done feeding on the cheap gold provided to them from the fierce manipulation last week that drove the price of gold back under $1100, the typical Asia closed/London opens sell-off began.

The massive manipulation has taken on “shock and awe” proportions.  The fact that is has become so blatant and extreme reflects the growing sense of desperation by the elitists to keep the entire western financial/economic system from collapsing.

If gold were allowed to trade free from the control imposed using western paper derivatives, the price would shoot higher and send the warning to everyone that the system is on the verge of collapse.

Several friends and colleagues recently have expressed a high degree of frustration and have asked me when I thought the suppression of gold would end.  I point out them, and I believe correctly so, the the criminals looting our system have no choice but to use any means at their disposal in their attempt to keep gold from moving higher and to keep the stock market aloft.

They have no choice.   A falling price of gold and a rising stock market are the only cover stories they have left in their cabalistic effort to hide the absurd lies which belie the flood of propaganda about the economy, inflation and unemployment.

But at some point their ability to keep the wheels on the fraud that is the United States is going to fail.  Every Ponzi scheme in history eventually collapses.  It’s impossible to predict when this will occur.  I do believe that there is a growing sense of awareness among the population that something is wrong.  This is reflected in the fact that US Mint gold coin sales hit a 29-year high in the third quarter this year.   For those wallow about in the cesspool of blind hope and have not prepared for what’s coming, their lives will be shattered.